Why and how accounting firms move to cloud

The transformative effect of technology on business is an inescapable reality of enterprise today – but understanding exactly why and how to embrace new technology isn't always easy.

In accounting, the drive to ditch spreadsheets for more intuitive and adaptable cloud-based software has long appeared compelling, but progressive firms still have to pick their moment to transition – and to decide on the terms of any move.

Old versus new

Peter Edwards, a partner at Warr & Co Chartered Accountants, says his firm saw the advantages of cloud-based software nearly ten years ago and was quick to promote it to clients.

According to Edwards, the first challenge for many firms is client scepticism towards new tools.

“Spreadsheets are well understood as a means of accounting in a digital world,” notes Edwards, “but they have always been quite restrictive, as well as leaving users more likely to work in isolation and prone to error.”

Warr & Co embarked on a mission to promote the advantages of cloud tools to their clients, keeping them engaged and in control of their accounting. “Ultimately, many of them have been easy to convince in practice,” says Edwards.

But convincing a client to try a new tool is only a starting point; they still have to feel the benefits.

“The terminology of accounting can bamboozle, but cloud tools like FreeAgent make the transition much easier. It’s easier because it is simple to pick up without getting a headache, it is harder to make bad mistakes and the interaction between accountant and client is improved,” he notes.

“At the same time, every software package has its particular advantages and a range of tools to support what’s needed,” continues Edwards. “What’s good for a one-person creative business isn’t the right fit for a company with stock levels to maintain or with foreign exchange in the mix, so our clients still range widely with the tools they use.”

Picking a winner

Warr & Co take a wide-ranging approach to cloud-based tools, but for some accounting practices it makes sense to specialise as much as possible.

When Sarah Solo, head accountant at PaperRocket Accounting, started the practice seven years ago they promoted FreeAgent to clients from the beginning.

“I had worked in accounting firms with spreadsheets and understood the pitfalls. I knew what I didn’t want, and carried that message to would-be clients,” says Solo.

PaperRocket takes on a range of clients including spreadsheet users, but its leaning towards cloud-based software tools – and FreeAgent in particular – is a defining feature of the practice.

“A few of the spreadsheet users were initially reluctant to move over, and we understand that – new technologies can be daunting.

“But we’ve found almost universally that as soon as the clients use a cloud accounting tool like FreeAgent they love it. The bottom line is that it saves time because it’s easier. You get a good picture of a company’s finances and a great overview of everything important. That’s something that gets people excited.”

Solo picks out FreeAgent’s bank feed as particularly popular with business owners and transformative of their bookkeeping experience. “It means there is little or no populating of the accounts – you just confirm how the money movements get assigned, which is close to effortless.

“Lots of clients also like the overview area,” adds Solo. “For example, if an owner is worried about paying out a dividend, they can see if they’ve got the invoices assigned in order for it to be permissible.”

Mobile matters

In the era of smartphones, mobile apps are another factor in making the switch to cloud-based software. These apps are included as standard in many cloud packages and deliver on-the-move efficiencies for firms and their clients.

Jessica Pillow, managing director of Pillow May Accountants, notes: “Half our clients are using FreeAgent, and most use the app and love it. Being able to save copies of receipts with the app makes tracking expenses easy. Reconciliation of bookkeeping items is easy with the app too – it’s one of the reasons cloud accounting is a game-changer.”

When it comes to transitioning to the cloud, there’s no single reason that is guaranteed to persuade all clients to move. However, understanding their clients’ businesses and where cloud tools can drive efficiencies has proved a recipe for success for all three of the practitioners featured in this overview.